Page 12 - THE NOTICEBOARD EDITION 63 OCTOBER 2020
P. 12
Page 12 October, 2020
Why Small Businesses Fail: Reasons for Startup Failure
Continued from pg 11
5. The Wrong Location
profitable. Keep in mind, that Your college professor was right
“everyone” isn't a market. -- location is critical to the
The market must be an s u c c e s s o f m o s t l o c a l
identifiable group of customers businesses. If your business
you will be able to reach with the requires walk-in traffic or a
marketing cedis and resources professional location to meet
you will have available. To avoid with clients, a good business
business failure after startup, location in the right community is
business owners need to keep essential. A bad location could
tabs on their market and spell disaster to even the best-
customers' changing needs on managed enterprise.
an ongoing base, as well. prone to disregard once a
business has been established. Some factors to consider:
A successful manager is also a Where your customers
3. Poor Management ·
Many a report on business good leader who creates a work are
failures cites poor management climate that encourages · Traffic, accessibility,
as the number one reason for productivity. He or she has a skill parking, and lighting
failure. New business owners at hiring competent people, W a r e h o u s i n g o r
frequently lack relevant training them, and is able to · equipment storage needs
business and management delegate. A good leader is also
expertise in areas such as skilled at strategic thinking, able · Location of competitors
finance, purchasing, selling, to make a vision a reality, and · Condition and safety of
production, and hiring and able to confront change, make the building
managing employees. If the transitions, and envision new
business owner doesn't possibilities for the future. · Local incentive programs
recognize what they don't do for business start-ups in
well and seek help, the 4. Insufficient Capital specific targeted areas
company may fail and go out of A common business money · The history, community
business. To remedy the mistake for failed businesses is flavor, and receptiveness
problem, small business having insufficient operating to a new business at a
o w n e r s c a n e d u c a t e funds. New business owners prospective site
themselves on skills they lack, often don't understand cash flow If you usually don't have
hire skilled employees, or or underestimate how much customers or clients entering
outsource work to competent money they will need to get the your business establishment,
professionals. business started. As a result, they the ideal location for your startup
Neglect of a business can also are forced to close before they could be your own home.
be its downfall. It's important to have had a fair chance to 6. Lack of Planning
regularly study, organize, plan, succeed. They also may have an Anyone who has ever been in
and control all activities of your unrealistic expectation of charge of a successful major
business operations. This incoming revenues from sales. event knows that were it not for
includes the continuing study of It is imperative to ascertain how careful, methodical, strategic
market research and customer much money your business will planning -- and hard work --
data, an area that may be more require. You need to know not success would not have
only the costs of starting your followed. The same could be
business but the costs of staying s a i d o f m o s t b u s i n e s s
in business. It is important to successes.
realize that many businesses It is critical for all businesses to
take a year or two to get going. have a business plan. Many
This means you will need enough small businesses fail because of
funds to cover all costs until sales fundamental shortcomings in
can eventually pay for these their business planning. It must
costs. A business consultant will be realistic and based on
help you predict how much accurate, current information
money you'll need to launch your and educated projections for the
business. future.
Components should include:
Continue on pg 13
